Thursday Closing Livestock Market Summary - Livestock Continuing to Trend Lower

GENERAL COMMENTS:

Fine wine may get better with age, but we can't say the same about this week's market. As the week has progressed, livestock contracts have continued to trade lower and the cash cattle market is significantly lower. This doesn't come as a surprise given the hiatus and pressure that COVID-19 put the market through, but that also doesn’t make it any easier to watch. Hog prices closed lower on the National Direct Afternoon Hog Report, down $0.01 with a weighted average of $30.15 on 7,427 head. July corn is up 3 1/2 cents per bushel and July soybean meal is up $0.90. The Dow Jones Industrial Average is down 1,861.82 points and NASDAQ is down 527.62 points.

LIVE CATTLE:

Live cattle contracts closed mostly lower but there were some deferred contracts that inched higher with minimal optimism. August live cattle closed $0.05 lower at $96.45, October live cattle closed $0.32 lower at $99.07 and December live cattle closed $0.15 lower at $102.77. Cash trade developed throughout the North and the South and for significantly lower prices in both regions. Live cattle in Kansas sold for $103 to $107, dressed cattle in Nebraska and Iowa sold for $162 to $165 and live cattle in Texas sold for $104 to $105. Thursday's slaughter is estimated at 117,000 head, steady with a week ago and 6,000 head less than a year ago.

Thursday's export report shared that beef net sales of 20,400 mt were reported for 2020, which was up 66% from the previous week and up noticeably from the prior four-week average. The three primary increases were from South Korea (7,200 mt including decreases of 300 mt), Japan (5,500 mt including decreases of 600 mt) and Mexico 2,300 mt.

Boxed beef prices close lower: choice down $0.50 ($235.56) and select down $2.96 ($219.88) with a movement of 181 loads (91.29 loads of choice, 25.54 loads of select, 7.47 loads of trim and 56.24 loads of ground beef).

FRIDAY'S CASH CATTLE CALL: Steady to potentially lower. We knew that this week could be rough as cash cattle prices were bound to weaken. If packers desire more cattle come Friday, prices could drop even more, but if their purchases are mostly just clean-up, steady prices could be in the ballpark.

FEEDER CATTLE:

Feeder cattle contracts continue to react to lower cash cattle prices and, unfortunately, both markets will most likely continue to trade lower in the weeks to come. August feeders closed $0.50 lower at $132.17, September feeders closed $0.90 lower at $133.25 and October feeders closed $0.80 lower at $134.00. At Winter Livestock in Pratt, Kansas, compared to last week, feeder steers weighing 550 to 750 pounds sold $2.00 to $3.00 higher, steers weighing above 750 pounds sold $2.00 to $3.00 lower and steer calves did not have enough comparable weights for an accurate market trend, though higher undertones were noted. Feeder heifers weighing 600 to 900 pounds sold steady to $2.00 higher, heifers over 900 pounds sold $2.00 lower. Slaughter Cows and Bulls sold steady to 1.00 higher. The CME feeder cattle index 6/10/2020: down $0.32, $129.38.

LEAN HOGS:

Pork producers continue to struggle as maximizing production reduces value but the importance of working through the backlog of hogs remains essential. July lean hogs closed $0.67 lower at $52.12, August lean hogs closed $0.95 lower at $54.87 and October lean hogs closed $0.10 lower at $53.40. Pork cutouts totaled 444.05 loads with 416.60 loads of pork cuts and 27.45 loads of trim. Pork cutout values: up $0.62, $69.46. Thursday's slaughter is estimated at 450,000 head, 13,000 head more than a week ago and 29,000 head less than a year ago. The CME lean hog index 6/9/2020: down $0.59, $51.18.

Thursday's export report shared that pork net sales of 17,200 mt were reported for 2020, which was down 1% from the previous report but up 60% from the prior four-week average. The three primary increases were from Mexico (5,100 mt including decreases of 100 mt), Canada (4,700 mt including decreases of 300 mt) and China (2,600 mt including decreases of 2,600 mt).

FRIDAY'S CASH HOG CALL: Lower. Steady to slightly lower trends is where the cash hog market is going to feel inclined to trade as packers work through the backlog.

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